More Canadians are moving away from US equity funds
Canadians are continuing to contribute to retirement savings plans despite market fluctuations, according to Sun Life’s 2025 Designed for Savings report.
The annual analysis, based on data from 1.5 million members in group retirement plans, outlines evolving behaviors in response to economic uncertainty.
The report found that in the first quarter of 2025, members shifted their investments away from U.S. equity funds at the highest rate recorded since the onset of the COVID-19 pandemic. However, the data showed that instead of withdrawing assets, plan members are reallocating funds, with withdrawal rates holding steady in comparison to previous years.
Average contributions across workplace savings plans reached over $9,500 in 2025, representing a 6% increase from 2022. The report suggests that plan members remain engaged with long-term financial planning and are opting to adjust risk levels rather than exit investment vehicles entirely.
Target date funds (TDFs) continue to play a significant role in workplace retirement strategies. TDFs now account for 42% of plan member balances, up from 29% in 2018. Members exclusively investing in TDFs outperformed those with non-TDF portfolios in eight of the past ten years.
Educational engagement is also linked to increased activity. According to the report, 70% of individuals who met with an advisor were more inclined to make financial decisions compared to those who did not seek guidance.
Dave Jones, senior vice president of Group Retirement Services at Sun Life, noted that a shift toward conservative investments has become more common.
"Some Clients are shifting their assets from U.S. equities into more conservative options,” Jones added. “They're engaged and taking their financial future seriously while navigating through turbulence."
Workplace savings plan participants are retiring approximately two years earlier than the national average, the report noted. Sun Life recommends plan members fully utilize available benefits, including employer matching contributions, and consider tools such as Sun Life One Plan for goal setting and tracking. The average workplace retirement account balance now stands at $94,220, a 16% increase from 2022.
According to Sun Life Financial Distributors (Canada) Inc. president, Rowena Chan, working with advisors offers clients a comprehensive strategy for managing investments, insurance, and health needs.
"Life is full of big moments, and Sun Life takes a holistic approach in our commitment to helping Clients achieve lifetime financial security. The peace of mind that a Client's future is protected for generations to come is priceless," said Chan.
